Get The Latest Finding Genius Podcast News
Delivered Right To Your Inbox

John Hagel is the co-chairman for Deloitte’s Center for the Edge, an organization researching the future of work in a changing world.

Tune in to learn the following:

Why—contrary to what many people assume—the replacement of jobs by machines will be beneficial to humans and enrich our lives

How the distinction between skill and capability is crucial to the philosophy behind the work being done at Center for the Edge

How the current coronavirus pandemic will spur discussions about the future of work

Hagel brings to the table over 40 years’ worth of experience as a management consultant, author, speaker, and entrepreneur. In this episode, he discusses ways to address the work-related roles of human beings in a rapidly changing world where technology is replacing highly standardized and routine tasks that were once carried out only by human beings.

Rather than a dystopian future where human-to-human connections are replaced by machines and human value or potential is diminished, Hagel sees quite the opposite; he sees a future in which technology allows humans to shape the future, redefine what it means to work, and focus on addressing unseen problems and opportunities to create more value and engage in more fulfilling work.

The philosophy at Center for the Edge relies in large part upon a distinction between skills and capabilities. Hagel explains that skills have value only in very specific contexts, for example being able to operate a specific machine under certain conditions. In contrast, capabilities have value in all contexts, and include curiosity, empathy, creativity, and imagination.

He argues that when companies and organizations focus on cultivating capabilities in their employees, human capital is increased, learning is accelerated, unexpected challenges are better addressed, efficiency is increased, and both employee and customer satisfaction improves.

Richard Jacobs: Hello, this is Richard Jacobs with the Finding Genius podcast. I have John Hagle. He is a co-chairman for Deloitte Center for the Edge with nearly 40 years of experience as a management consultant and author, speaker, and entrepreneur. He served as a senior vice president of strategy at Atari and is a founder of two Silicon Valley startups, is author of some books too, “The Power of Pull”, “Net Gain”, “Net Worth”, “Out of the box” and “The Only Sustainable Edge”. So we’re going to talk about what’s known as the future of work. John, thanks for coming.

John Hagel: I appreciate the opportunity. Thank you.

Richard Jacobs: Well, first of all, Definition when you talk about the future of work. Is it the near future or the far future or a mixture of both?

John Hagel: It’s a mixture of both. I think that the topic has become so widely discussed and used. It depends on who you’re talking about. We tend to favor an approach that we call zoom out, zoom in and if you’re really focusing on the future, you need to zoom out 10 to 20 years, have a real sense of where things are headed and then zoom back in and focus very much on the next six to 12 months. And what specific actions can you take to accelerate your movement towards that future?

Richard Jacobs: So you’re not just a passive observer of what’s going to happen. Do you want to be active and creating that future?

John Hagel: Absolutely. We’re big believers in the potential and opportunity to shape the future, to really help move it in directions that are going to create more opportunity for people versus other futures that are perhaps much more dystopian.

Richard Jacobs: So is it a balance between making current people’s work more enjoyable and fulfilling able or allowing more people to work if they wish to? Like what are some of the goals that, that say, Oh well work is better now, X number of years from now than it currently is?

John Hagel: Well, our perspective based on the work we’ve done is that while there’s again huge discussion around the future of work covering everything from re-skilling to the gig economy to unemployment, an infinite number of topics. The one topic that really is not on the agenda but we believe needs to because it’s ultimately the key to the future of work is the question of what should work be for human beings? And I’m going to overgeneralize perhaps, but I would say that at least again, based on the work we’ve done most work in most companies, especially large companies or large organizations, not just companies but large institutions, most work is basically tightly specified, highly standardized tasks that you do in a very repetitive way. And that was the key to institutional success for over a century. There were institutions that manage to get people to do those kinds of routine tasks accomplished a lot. The challenge we see right now and the opportunity is that frankly if that’s what work is, machines can do that so much better than we human beings can. Routine tightly specified tasks, machines do that without getting distracted, without making mistakes, without getting sick. Let the machines take that work. Our view is that should have never been worked for humans to begin with. It had to be because there were no other options. But now there are options and it gives the potential to really step back and say, okay, if machines are going to take the work that we were doing, what work could we as humans be doing that would have much more impact? And again, at a high level, we focus on what we call redefining work and really focusing everyone in an organization on addressing unseen problems and opportunities to create more value wherever they are in the organization. And our view is there’s infinite potential to create more value. The problem is workers have just been so consumed with those routine tasks, they haven’t even seen the problems and opportunities much less address them. Now they can do that. And that’s something that we as humans should be doing and I think we’ll be much more fulfilling work than the work we’ve been doing in the past.

Richard Jacobs: Any great case studies that you’ve been involved in or you think are great examples of the shift and what happened

John Hagel: Yes I should say that all our research is based on case studies. So if anyone listening to this is interested, they should definitely go search for the Center for the Edge. And we publish all our research reports. They’re freely available. The case studies are all in there. I would say just as one example, we looked at a company that in the clinical diagnostics business and their call centers, they were having problems with customer turnover, customer’s unhappiness. And it turned out the customers were frustrated when they went to the call center, they weren’t getting their problems effectively addressed. And so they were getting frustrated and leaving. The company basically took that as an opportunity to say, okay, we have a problem here. The workers who are best equipped to deal with this problem, to address this problem are the workers on the frontline in the call center. So they went to the call center workers and they said, number one, we’re going to guarantee that you’re not going to lose your jobs, you’re going to continue working for us. But your first assignment is to figure out how to get technology to take over more and more of the routine tasks that you’re doing and those routine scripts that you’ve been following in your call center work and get that handed off to the machine, have websites that can be much more effective in answering those kinds of routine customer questions. And that will free you up as call center operators, really focus on the challenging problems on unforeseen problems and questions that the customers have. And then they organize the workers into pods, small groups where they could problem-solve together and help each other get to better and better answers to the questions that had not been anticipated from the customer. The bottom line, customer satisfaction significantly increased worker satisfaction significantly increased because finally, they were doing things that really made a difference versus just following the script.

Richard Jacobs: So did their job has changed to different jobs or what was the long term impact?

John Hagel: Well, the job was still a call center operator, but the job was very different in the sense that it was no longer the routine questions the scripts could answer. It was really focusing on the questions that customers were asking that nobody had seen before or heard before. Being creative about how to respond to those questions.

Richard Jacobs: How much of their jobs on average were they able to automate that they didn’t have to do it anymore.

John Hagel: It’s hard to quantify. I’d say probably around 80% of the work they were doing could be automated, but that they had been doing.

Richard Jacobs: Yes, that’s tremendous.

John Hagel: But now it freed them up to really invest the time and effort on the questions that really mattered. The non-routine question,

Richard Jacobs: If given the chance, I mean, do most workers want to do this? Is their a big section of worker that just wants to show up and do the minimum and get paid and they don’t care even if you offered them this opportunity?

John Hagel: I think I get the pushback a lot. Some of us are capable of being creative and problem solvers. That’s fine. But most of us just want to be told what to do. I actually believe we as human beings all want to make a difference that matters. That’s unique to us. And I look at examples like the one I just gave, a famous one that’s been talked about for decades now is what Toyota did in their manufacturing operations with their frontline factory workers where they redefined the work and said, yes, you have some routine tasks you have to do. It’s an assembly line, but your real job, your real job is to identify problems and solve those problems as soon as you see them. And if you can’t solve the problems, we’ll give you a cord. You pull it, we’ll stop everything. We’ll swarm you with a team of people to help you solve that problem and you’ll be a hero for having solved the problem. Passion levels in that workforce went way up because now they were making a difference. I mean, the problem I think that most people encounter in their work is they’re just cogs in a machine. Anybody could do that work. Now they’re making a difference. And that is exciting, I think to most people, I won’t say everyone, but my belief is the vast majority of people hunger for that kind of opportunity to make a difference.

Richard Jacobs: Yes. I remember I’ve worked at jobs where what I was doing meaningless, so I didn’t want to do it. You just felt like, what’s the point? So I’m sure it’s a lot better if you give people purpose and show them that what they’re doing makes a difference.

John Hagel: Yes. It also brings in another dimension of the research we’ve been doing around the future of work in the future of work everybody’s been talking about re-skilling. The half-life of the skill is decreasing. You’re going to have to learn new skills at a more and more rapid rate. That’s the future work. Okay. Understood. Skills are important. Our belief, again, is there is an unaddressed opportunity, which is to cultivate capabilities. And to us the distinction, I mean it’s ultimately all semantics, but when most people talk about skills, they’re talking about something that has value in a very specific context. Like how to operate this machine in this environment or how to process this kind of paper in this environment. Very valuable in that specific environment. For us, the contrast is capabilities, have value in all environments, in all contexts. And what we mean by capabilities are things like curiosity, imagination, creativity, empathy. Those are things that are hugely valuable. And yet most institutions do not focus on cultivating those capabilities in their workers. It’s all about skills. And our belief is that actually the people who cultivate those capabilities will learn skills at a more rapid rate than those who don’t have the capability. The pushback I get again as well, some of us can be creative, but most of us are not creative. Well, my response to that is let’s go to a playground and look at children six or seven years old. Show me one that isn’t curious, creative, imagining. We all had those capabilities. What happened? We went to school and the lesson in school was just listen to the teacher, memorize what the teacher says and play it back. Preparing them for routine tasks in the work environment. But our belief is capabilities are like muscles. We all have muscles. Some of us choose to exercise them and they come out, others don’t and they atrophy. But guess what? The muscles are always there waiting to be exercised. Our belief is the same thing applies to capabilities.

Richard Jacobs: So what would be some ways to encourage us? Do you have a weekly brainstorming session with different groups of the company and mix up the groups each week? What are the best practices for fostering this?

John Hagel: Yes, again, we’ve done a lot of research on this, on this particular topic. It’s in fact, our current research is specifically on cultivating capabilities, but I think more generally we’ve come to the view that a key part of work in the future and today, frankly, is how to learn faster in work, whatever you’re doing. Because if you’re not learning faster in a rapidly changing environment, you are going to be under more and more stress. So in that context, we’ve come to believe that no matter how smart any one person is, they’re going to be a lot smarter as part of a small workgroup that has deep trust-based relationships with each other and where they’re constantly challenging each other and encouraging each other to come up with new and better approaches to the work that’s being done. And so we’ve spent a lot of time looking at the practices in those workgroups that can help to cultivate the capabilities, accelerate learning. I mean, we won’t go into all of the practices. We call it a business practice redesign. And again, there’s a research report on that. But practice areas has to do with what we call productive friction that in the workgroups that are learning fastest, they’re constantly challenging each other. They’re constantly asking questions, why are we doing it this way? Why couldn’t we do it this way? And trying to get to better and better outcomes. But they’re doing it with respect for each other because they all share that commitment to getting to better impact. And so it’s done with respect, but its constant challenging and that helps people to learn faster and cultivate those capabilities.

Richard Jacobs: What kind of organizations would benefit from this? All of them? What if you just work at a really basic place, a pizzeria, should you do anything like this or is this only reserved for larger organizations?

John Hagel: No, no. Our belief is it applies in all organizations and all departments or groups in the organization. I mentioned Toyota factory workers. Another example is a company, a tomato processing company, one of the largest tomato processing companies in the US but not a huge company. And the workers in that company are mainly high school graduates. They’re not even college graduates. Its manual labor factory work, fieldwork. In that company, they have focused on cultivating these capabilities and in all parts of the organization, in the factory, in the field, everywhere. Their belief is in a rapidly changing world, we are constantly encountering these new problems or opportunities to create more value. I just give another piece of data from the research we did. We looked in large companies in a broad range of departments in those companies and we found that on average the headcount, the people in those departments were spending somewhere between 60 to 70% of their time on what we call exception handling. It was things that weren’t anticipated that weren’t part of that process, that had been defined with the process manual and where the scripts existed and they were scrambling to try to figure out what do I do and viewing it as a distraction, as a problem because their goal was to get back to the assigned tasks. And so our view again is that in a rapidly changing world, exceptions are going to proliferate everywhere and all workers should have the opportunity to not only see them but address them and have more impact.

Richard Jacobs: So getting back to the future of work, what do you think it will look like? Is it just going to be companies paying attention to the emotional wellbeing, intellectual wellbeing of their employees and having them work on systems and improving their own jobs and their own lot or is it going to be something different?

John Hagel: Well, I’d say that ultimately the primary focus should be on how to create more value for the key stakeholders, particularly the customers, but third parties and other parts of the organization. Where and how can we have more impact that’s meaningful to those stakeholders and be constantly challenging to see how to get to that next level of impact. Our belief is that it’s a win-win situation. It’s a win for the company or the institution because they’re going to be having more impact and providing more value. But it’s also a win for the workers because they’re going to get excited again that they’re making a difference, that they’re making an impact that matters to them. And so it’s a win on both sides of the equation and ultimately it’s going to help everyone to achieve more of their potential. Again, one of our key themes in our work is if you look ahead into the future, we have expanded opportunities to achieve more of our potential, but our institutions are not organized to do that. We are organized around this model of scalable efficiency. How can we become more and more efficient at scale? And that’s the key to success. The problem with scalable efficiency is it is a diminishing returns proposition. The more efficient I become, the harder it is to get that next level of efficiency. If you focus instead on increasing value, that has infinite potential because there unlimited needs on the part of the people that are being served. So as soon as you address one set of needs, there’s another set of needs that can be addressed and that expands the opportunity at a rapid rate and much more exciting over time.

Richard Jacobs: So is the future of work headed in the right direction or is it just really a continuation now? Let’s get more efficient. Let’s get some automation in here so that we have to have fewer employees and we could just be more profitable, more efficient. Is any attention being paid to what you’re saying?

John Hagel: Yes, I’d say that I’m going to generalize again, there are some exceptions, but in general, I say that when I deal with senior executives of particularly large companies around the future of work, the only two questions they have are how quickly can I automate and how many jobs can I eliminate? It is all about scalable efficiency. Now, I should say as context, I am an optimist. So I actually believe that the current crisis we’re in, the pandemic crisis is actually going to be a significant catalyst to shift that discussion in conversation because they’re going to see that the approaches that they’ve been using to get to efficiency are actually making them very fragile and vulnerable. And that the key to really being able not only to thrive, but to survive in rapidly changing times with unexpected challenges is to cultivate this different form of work. And that’s going to be, I don’t want to underestimate the challenge of making that shift, but at least I think there’s going to be more and more motivation because I think we’re seeing right now that the so-called efficient institutions that we’ve built are actually not very effective in dealing with unexpected challenges.

Richard Jacobs: What do you think will be either due to your intervention or not? I mean, what do you think are going to be the effect of the current shutdown and I mean in general the changing nature of work and automation then smart systems, everything. What does the world look like in terms of work in the next year and then in the next, maybe in 20 years?

John Hagel: No, there’s no question. We’re in a challenging time and the recovery is going to require a significant effort and a lot of it hinges on how quickly the consumers come back and really are wanting the products and services they had purchased in the past. And so the adjustment phase is going to be challenging. But I do think that in the end, this is going to be a catalyst to help institutions to thrive because again if they’re more focused on how to deliver more and more value back to the customers that they’re serving and the third parties and communities they’re in, that’s going to benefit everyone. And that’s going to lead to a much healthier economy and society over time that will be much more effective in responding to unexposed challenges and opportunities that are emerging at an accelerating rate.

Richard Jacobs: Any companies that you worked with that just like, they blew your mind and what they’re doing and you’re like, wow, this is crazy. This is really great.

John Hagel: No, I can’t go naming specific companies, but I will say, I mentioned the tomato processor. That blew my mind in the sense that again, it’s a very traditional business. Its workers who are essentially manual labor. It’s not knowledge workers sitting in offices with college degrees or PhDs. But every one of those workers were excited about the opportunity to make a difference because they were given not only the latitude and permission, but the encouragement to really find problems and opportunities that needed to be addressed and addressing them, not just seeing them, but acting on them and having an impact and learning from that impact.

Richard Jacobs: Alright. And then probably the last question. When people say, Oh, machines are going to take our jobs, quote-unquote, what do we do? What’s your answer to that? I mean, you’ve already given it, I guess by elevating people that work within organizations, but when you run into that, what else do you say?

John Hagel: Yeah, I certainly understand that and I think many people understand that our institutions today are driven by that model of efficiency and that jobs are increasingly at risk because the key objective is just to eliminate jobs versus again, the notion of focusing on opportunities to create more value. And I think that while it’s understandable that there’s that fear of job loss, that there is an opportunity to head in a very different direction. And our belief is the institutions that make this shift, that shift to redefining work and cultivating capabilities and focusing on delivering more and more value to the stakeholders are going to be the ones that thrive in the future. And the ones that hold on to that efficiency model and just focus on cutting jobs, they’re going to marginalize themselves out of business. So yes, in the short term, there may be some job loss ribbon by those kinds of institutions, but in the end, the institutions that are going to thrive and grow are going to be the ones that make this transition and redefine the work and create an environment for workers that’s going to be much more stimulating and satisfying than the ones they have today.

Richard Jacobs: Yes. Automations is okay. But I mean, it’s not a human and it’s just mediocre at best. It seems like you always need a human layer on top of any automation to make things a lot better and even at McDonald’s, I remember there was one where they put in these big kiosks that you can order from and the people just handed you the food. But at least it is a problem. You could talk to a person, say, Hey, French fries are all burned, or whatever it is. I mean, especially remotely automation, I don’t know. There’s no humanist to it. There are no exceptions to it. It’s just cold and dead. And again, mediocre, it doesn’t do a great job. A company that has a human element to it would be far superior.

John Hagel: Absolutely. And I will say one of my favorite quotes is from the painter Pablo Picasso, many decades ago, he made the observation that computers are useless. He said all they can do is provide you with the answers. And it was kind of interesting because if you reflect on that what he was saying was what’s really valuable and important are the questions, what are the questions that matter? And yes, the machines can help us provide the answers, but it’s seeing the question and focusing on the question that becomes the real value add. And again, our belief is that’s where humans, and again with curiosity, we are naturally questioning. I mean, again, as children certainly and some of us continued that into our adulthood, but all of us have the capability of cultivating that again and being much more focused on what are the questions that matter.

Richard Jacobs: So what’s going to be your role or what is your role now? What are you doing at the future of work?

John Hagel: Well, we’re continuing to do work. Our research work, we have pursued research in this broad topic. Part of the Center for the Edge is to address to identify unseen opportunities for CEOs that should be on their agenda but are not, and to do the research to persuade them to put it on the agenda. So we do the research, then we actually work on building awareness. We go out and speak at conferences. We host meetings where we introduce the perspectives and the opportunities and we work to build alignment among executives. So they converge around the opportunity and then act on it. And we work with them as coaches and counselors on acting in ways that can get more and more impact and how to learn from that action. Not just take action, but to learn and get better and better with the impact.

Richard Jacobs: Well, very good. John, what’s the best way for people to engage with you? Should they start with your books? Where can they go?

John Hagel: Many options. I certainly, I’ve written many books. The most recent one was the Power of Pull, which would certainly encourage anybody who’s interested to read that book. I’m very active on social media like LinkedIn, Twitter, and Facebook. They can find me there. I post a lot on those. I have a blog johnhagle.com and then the Center for the Edge website has all our research reports, so many ways to reach out.

Richard Jacobs: Okay, well, very good. John, I’m glad you’re thinking about this stuff and working literally to make people’s working experience and their lives better, so thank you for coming on the podcast.

John Hagel: Well, thank you. I appreciate the interest and hope to continue the conversation with some of the people hearing the podcast. For sure.